Comments on: Pssst Wall Street: Change the Name from Bonuses to "Making Work Pay" Credits http://truthonthemarket.com/2009/02/02/pssst-wall-street-change-the-name-from-bonuses-to-making-work-pay-credits/ Academic commentary on law, business, economics and more Sun, 12 Feb 2012 23:39:41 +0000 hourly 1 http://wordpress.com/ By: LOVELY http://truthonthemarket.com/2009/02/02/pssst-wall-street-change-the-name-from-bonuses-to-making-work-pay-credits/#comment-7518 Wed, 16 Dec 2009 22:55:53 +0000 http://www.truthonthemarket.com/2009/02/02/pssst-wall-street-change-the-name-from-bonuses-to-making-work-pay-credits/#comment-7518 Do you need a loan from a God fearing loan agency for your business xmas and person need contact this email that is were i got my loan contact them now loan_dept009@yahoo.com. hurry now for your loan today and note that they are real legit and God fearing aways remenber that a trial must surely convince you…..

]]> By: Blake http://truthonthemarket.com/2009/02/02/pssst-wall-street-change-the-name-from-bonuses-to-making-work-pay-credits/#comment-7517 Wed, 04 Feb 2009 15:45:23 +0000 http://www.truthonthemarket.com/2009/02/02/pssst-wall-street-change-the-name-from-bonuses-to-making-work-pay-credits/#comment-7517 http://news.yahoo.com/s/ap/20090204/ap_on_go_pr_wh/bailout_executive_pay

This seems somewhat contradictory to me: The banks who are in the most need get executive pay capped. Capped executive pay rates restricts the pool from which executives are drawn. The neediest banks, therefore, get those executives who are willing to work below the market rate for their expertise. Doesn’t this limit the neediest banks from the best talent when it is needed most? I guess that’s the price of socialism.

]]> By: David Hoopes http://truthonthemarket.com/2009/02/02/pssst-wall-street-change-the-name-from-bonuses-to-making-work-pay-credits/#comment-7516 Wed, 04 Feb 2009 05:56:34 +0000 http://www.truthonthemarket.com/2009/02/02/pssst-wall-street-change-the-name-from-bonuses-to-making-work-pay-credits/#comment-7516 Very nice post. I’ve been troubled by this for a few years. Someone accrues bonuses for 20 years and is then criticized for cashing them in at retirement.

]]> By: Geoffrey Manne http://truthonthemarket.com/2009/02/02/pssst-wall-street-change-the-name-from-bonuses-to-making-work-pay-credits/#comment-7515 Mon, 02 Feb 2009 17:37:01 +0000 http://www.truthonthemarket.com/2009/02/02/pssst-wall-street-change-the-name-from-bonuses-to-making-work-pay-credits/#comment-7515 Thom: great post. I completely agree and have been making these points to the very few people who will listen. Actually, though, I think you can go further: Even if the bonus recipients had a significant hand in causing the problem–that is, even if the behavior that merited bonuses was overly-risky and likely only to offer short-term gain–even, in fact, if the behavior were downright deleterious to the economy (but presumably not, in expected value anyway, the company)–even then the bonuses should be paid because contracts should be honored. It is a simple (although I am certain in many cases, knowing) confusion of ex ante and ex post. Ex ante these contracts were negotiated as Thom describes. If ex post the world crumbles but the contract still specifies a big payout, then the payout is merited, however absurd it looks to be rewarding performance in failing firms. And yet, considered from the ex ante point of view this is perfectly appropriate. Often these contracts are precisely engineered to hedge risk so that a firm can induce employment and performance in the face if uncertain long-term prospects. I guess this kind of analysis is “nuanced,” but it doesn’t seem very difficult to me.

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